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My Journey to Finding Product-Market Fit

Marketing My Journey

While building a SaaS product there are many common problems, one of those being product market fit. Here is my story on finding product market fit.

Ever poured your heart into a SaaS product only to wonder if anyone actually needs it? That was me a few months ago, diving headfirst into the challenging yet rewarding journey of finding product-market fit. Product market fit is incredibly important because you can spend months or years building a product no one wants. Sometimes we fall in love with our ideas so much that we are blind to whether or not we are even solving a real problem. But solving a real problem isn't enough, there has to be enough people willing to pay for our idea to sustain our business as well! Because of this, I wanted to dive deep into learning about product market fit and how I could employ this in my own business. We will explore the mistakes I made in the beginning, the research I did, and the work I have done since then.

My 3 Initial Mistakes in Finding Product Market Fit

  1. The "Problem" Isn't Something Faced By Others

I am probably like you, I can come up with a bunch of software ideas. Some of them would be very useful for me, but would anyone else even care about my solution? If there are hardly anyone else who would find it useful, the product won't succeed. If it is useful, but not useful enough that someone would hand over money for the solution, the product will still fail. This was a major issue with some of my ideas, I wanted to build a language learning habit tracker. There are numerous free habit trackers out there, why would anyone pay for my solution? I wanted to build a SaaS Market Fit Finder, but most of the process was still going to be manual, what problem is my software solving? These were common problems I encountered.

  1. The Problem Was Too General or Complex

I spent some time and money trying to find product market fit for a retirement tracker and then an investment tracker. This product has competition, it is something people would pay for (other products charge for their solution). However, there still was a problem: There are some big players in the industry. How would my product find a niche in this large industry and how can I solve that problem? Are there users wanting my main features? These were more questions I didn't have answers to.

  1. No Track Record of Successful Competition

This was another problem I encountered mainly with my language learning habit tracker and my market fit finder products. The fact that there is no competition is probably not a great thing. Sure, it is possible that the idea I came up with was so revolutionary that it just hasn't been explored yet but that is very unlikely. It is more likely that I am not solving a real problem or it is something people are not willing to pay for. After some reflection I realized why there weren't any existing products that did something similar to what I wanted to do. I moved on from those ideas.

3 Things I Learned About Product Market Fit

With these problems, I began to research how to successfully markets and products that have potential. A lot of my research came from the book "The Personal MBA" by Josh Kaufman. I highly recommend purchasing this book if you haven't already. We will explore a couple different concepts I got from this book: Evaluating a Market, MEVO and Shadow Testing. Let's explore these ideas.

  1. Evaluating a Market

One of the first things I wanted to do better was to evaluate a market. To solve problem #1, market research can quickly eliminate ideas that don't have much potential. But how do we evaluate a market. Here is a process I really liked. Research these 10 things for the market and the product you want to build. Rate them from 1-10 and add up the final score at the end. If the score is less than 50, move on to something else. If the score is between 50 and 75, it has potential to pay the bills but it won't be a homerun without a significant investment. And finally, if the score is over 75, it is a very promising idea.

  • Urgency - Do people need need this badly?
  • Market Size - How many people are actually purchasing a product in this market?
  • Pricing Potential - What is the highest price people are willing to pay in this market?
  • Cost of Customer Acquisition - How much does it cost to get a sale in this market?
  • Cost of Value Delivery - How much would it cost to deliver the value you are promising to deliver?
  • Uniqueness of Offer - How many competitors are in this market? We want competition but too much is still bad.
  • Speed to Market - How quickly can you create something to sell?
  • Up-Front Investment - How much money will you have to invest before selling something?
  • Upsell Potential - Are there secondary offers you could make to your customers? Can you combine things in a way to create upsells?
  • Evergreen Potential - How much additional work is needed to keep providing value after you make the sale?

With these questions answered you should have a better idea on how the market looks for your potential product. I hope as I gain experience in this, I can create a more in-depth process on how to objectively measure each of these questions. After I achieve this and prove it successful with my own products and market research, I will create a guide on that.

  1. Minimum Economically Viable Offer (MEVO)

A MEVO is a product that provides/promises the least amount of features possible. It is the least amount of needed features to have something to sell. You don't want to invest a lot of time or money into this. Start selling this and get as much feedback from the people paying you as possible. Implement the feedback and continue selling. How do you sell a MEVO? Shadow Testing is a strategy for this, we will go over that next.

  1. Shadow Testing

The idea of Shadow Testing is to actually sell something to potential customers even before your product exists, there is no better way to prove validity of your idea other than actually selling something to your potential customers. So in order to do this, you need something to sell. You also need to be upfront with your customers that the product is still a work in progress. There are two ways you can do this:

  • You can offer a pre-order

One way to test your product is to create mockups and prototypes and offer a pre order to your customers. You would not actually charge any of the payment methods until you have value you can deliver but if someone is willing to enter their card info for a pre-order, there is clear proof that there is interested paying customers for your product.

  • You can create a MEVO

If you have the ability to create a very simple MEVO that you can put together in a couple days, it might be worth creating a simple MEVO and start selling it. This won't include every feature you are planning on selling to your initial customers or even every feature you want in your MVP, it is just the bear minimum needed to have something to sell. This is the route I am choosing but I have the software engineering and AWS experience to put together a MEVO very quickly. If this isn't you, this might take too much time, effort and money to take this route.

3 Strategies I Am Employing

I took this new knowledge on finding product market fit and began a process of finding a product I could build that solved for the problems I had originally.

  1. Look At SaaS Products Currently For Sale

First I wanted to find products that have had success. To do this, I looked at various online marketplaces and sorted the SaaS for sale by highest profit. I looked down this list and found products that were in markets I was interested in. I found a AI Chatbot for sale that was making a significant profit. This started my journey back into the language learning market after my previous failed ideas. This fixes my first few problem, does anyone actually have this problem and are they willing to pay for a solution? Clearly with this data, there appears to be some.

  1. Check The Reviews of the Main Competitors

The next step I took was to look at reviews for potential competitors in this market. Luckily there are many competitors but not too many big name players. This helped me verify my first problem even further. The next step is to find problems the customers have and what they are asking for as features to a product like mine. I looked at a few different review sites, Capterra and G2 are good starting points. App Store reviews can be another good resource. The goal is to find what customers like, dislike, and wish existed in the product. This can be used to help find a unique selling proposition for your product.

  1. Build a Feature Matrix and a SWOT Analysis

This idea builds on the researching competitors. At this point, you probably have an idea on who your competitors are and what features they provide.

  • Feature Matrix

Continue this research and create a feature matrix, make a matrix with your competitors and commonly offered features. Which features does each product offer? Is there any product not offering the features the customers are asking for? This can help you determine gaps in the market that you could solve.

  • SWOT Analysis

A SWOT Analysis will help determine the strengths, weaknesses, opportunities and threats of your product. Using all of the data you compiled up to this point you can hopefully see some opportunity for your product but there are also probably roadblocks to being successful. Create a complete SWOT Analysis to be able to objectively look at all of the data. Use this to determine if this idea is worth pursuing.

These are the strategies I am employing and I certain this will be a step forward from the problems I faced. As I learn more I hope to put together a complete guide on this process. This is something I will do after I prove these ideas to be successful in my own products.

My Major Takeaway

By focusing on making improvements on existing products in the market and finding gaps in the market, I can help increase my chances of finding paying customers. There are already customers and successful products, if I provide enough value, maybe I can convince them to purchase my product. This is a work in progress and as I learn more I will share it as well. I am now going to go out in the world and try to start selling my MEVO and I encourage you to do the same. Remember, the journey to product-market fit is filled with learning, adaptation, and growth. In my early attempts, I faced challenges like misidentifying the problem, tackling overly general issues, and overlooking the importance of competition. But each mistake taught me valuable lessons and brought me closer to my goal. Keep listening to your customers, stay agile, and your SaaS product will find its niche. This is just the beginning of our success story!